Is There Any Time-Varying Relationship between Fiscal and Trade Deficits in Turkey?

Bariş Gök and Nazif Catik ()

Prague Economic Papers, 2016, vol. 2016, issue 5, 607-616

Abstract: In this article we analyse the evolution of the relationship between budget and trade deficits in Turkey covering the period 1985:1 to 2013:4. The structural break tests suggest the existence of a regime shift after the severe 2001 crisis. Time-varying responses obtained from the TVP-VAR model up to 2003 support the Keynesian view by providing evidence in favour of twin deficits, whereas the remaining responses suggest the remarkable divergence between fiscal and trade deficits.

Keywords: Turkey; TVP-VAR model; current account; budget account (search for similar items in EconPapers)
JEL-codes: C32 F32 H30 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.18267/j.pep.577

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